Sears Holdings chairman Edward Lampert told investors at the company’s annual meeting of shareholders, held yesterday, that the struggling company is in dire need of better brand promotion and improved customer service.
“We need to come up with bigger and better ideas,” Lampert said, adding that he sees no evidence of economic recovery in the United States in the near term.
The future of Sears’ proprietary Craftsman tool and Kenmore appliance brands factored prominently in discussions. Sears recently consolidated the well-known brands, along with Diehard batteries, into a single operating unit within the company. One goal of the move is to have the ability to license or distribute those brands through competing retailers.
"If it's a really good answer for us to sell Craftsman and Kenmore by going to specific retailers, and we believe the benefit of doing that is greater than customers [shopping in our] own stores, we would do that,” Lampert said.
William Ackman of Pershing Square Capital Management asked Lampert how executives would be compensated for the licensing plan if it goes forward and fails. Lampert said the idea was just one of many items being considered to help boost overall sales for the company.
Lampert added that finding an executive to oversee the development of the Craftsman and Kenmore brands is a high priority. Sears Holdings is also searching for a new CEO to replace Aylwin Lewis, who left the company in February. W. Bruce Johnson has been serving as interim CEO of Sears Holdings since that time.
One thing is clear: Sears will have to do something soon to help boost sales. In April, the company announced it would eliminate 100 jobs at its headquarters, and in its fourth quarter, the company reported net income of $426 million, down 47.5 percent from the prior-year quarter. Net sales were $15.1 billion, down 6.8 percent from $16.1 billion from the previous year. Net income for the full year was $826 million, down 44.6, while sales for the full year fell 4.3 percent.
Sears will release fiscal first-quarter results soon -- the company’s first quarter ended May 3.